Interelate: More on Tap Than Apps

Interelate, a customer intelligence ASP, bundles applications and industry
expertise in data analysis, database marketing, analytics, and CRM to
deliver an analytical CRM service to its customers. Analytical CRM functions
include data mining, campaign management, personalization, and click stream
analysis. Interelate provides its clients with customer analytics, proprietary
and 3rd party data models and scoring, data mining, campaign management,
personalization, and real-time recommendation capabilities. This is done
by pulling data from its client's customer and operational data systems
and processing it through Interelate's analytics platform.

The offering consists of two components. The first is hosted applications
from vendors such as E.piphany and Net Perceptions. The second is expert
data cleansing and analysis so the data processed by the applications
is actionable for the client. Interelate recently announced packaged services
in three industry verticals for its Global 2000 clients:

E-Commerce - A service designed to enhance customer acquisition
and loyalty by attracting site traffic, segmenting registered users
by value, and converting high-value segments into customers.

Financial Services - A service designed to increase cross-selling
by segmenting a client's existing customer base depending on a client's
likelihood to purchase additional financial services.

Travel and Leisure - A service designed to improve both customer
acquisition and cross-selling by profiling the behavioral predisposition
of existing customers and new prospects.

Interelate
reports average implementation time ranges from 2 to 3 months depending
on the nature of the client's existing IT infrastructure and the type
of services requested. Pricing depends on the range of services provided
as well as the amount and frequency of data analysis. Interelate's focus
is to compete primarily on quality of service rather than price.

Market
Impact

Interelate's business model is highly focused on delivering analytical
CRM services to Global 2000 companies in the three vertical markets. This
is a different approach from that of many ASPs such as Corio and USInternetorking,
who deliver many applications to a wide range of organizations with implementation
expertise, but limited expertise in providing best practices on using
the applications after they are installed. Interelate's key differentiator
is that they do have the expertise to provide best practices for using
software packages such as E.piphany and Net Perceptions.

Although
TEC is unaware of any direct competition, a number of CRM vendors supply
analytical CRM applications. Companies such as BroadVision, Broadbase,
SAS, Quadstone, and WebTrends provide one or more of these functions.
Finding an ASP that hosts these products with value-added services is
difficult.

Some of Interelate's achievements validate their business model. Goldman
Sachs is both a customer and a financier. Additional financing comes from
firms such as Deutsche Banc and Dell Computer. Other high profile customers
include McKinsey & Company, Nissan Corporation, and the US Department
of Defense. Interelate has also attracted 250 employees since its inception
in July 1999.

User
Recommendations

Interelate's offering is not for every firm considering a CRM implementation.
Their service is targeted towards Global 2000 organizations that need
analytical CRM functionality but do not want to invest the time and upfront
cost, nor be subject to the high implementation risk associated with installing
the components of analytical CRM. Furthermore Interelate's offering does
not focus on providing operational CRM. Firms looking for call center
management, sales force automation, or customer service tracking need
to consider other options.

One
of the most compelling reasons for a Global 2000 company to select Interelate
is the fact that there are no additional human resources or technology
investments necessary to be up and running. Interelate claims to provide
100% of the functionality of the E.piphany and Net Perceptions products
to a business manager.